Tata Power is charging up its renewables play

Tata Power is charging up alongside its energy rivals. Long viewed as a problem spot in the wider Indian salt-to-cars conglomerate, the $5 billion company’s net profit was flat-ish in the March quarter. Yet the stock is up 275% in the last twelve months.

Boss Praveer Sinha looks to further trim debt by cashing in on a renewable energy business he’s counting on to power growth. Green assets account for about one fifth of the company’s sum-of-the-parts value, per IIFL Securities analysts.

The company was cryptic about next moves on its earnings call, but an initial public offering looks likely after plans to bring outside investors into its renewables business stalled. India’s rapid expansion of clean energy capacity is fuelling corporate activity; Adani Green (ADNA.NS) sold a 20% stake in itself to France’s Total (TOTF.PA) in January, while Goldman Sachs-backed (GS.N) ReNew Power (RENE.BO) is going public in New York by way of a merger with a blank-cheque firm.

Judging by those deals, a listing is more hassle but a decent plan B – and may help Tata retain more upside in a hot sector. (By Una Galani)